How Changing Mobile Technology Is Changing The Way We Do Business

© 2013 NTT DOCOMO, INC. All rights reserved.

Mick Etoh (@mickbean)Feb. 13th, 2014

How Changing Mobile Technology Is Changing The Way We Do

Business

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Who am I?• Mick Etoh, SVP, NTT DOCOMO• Role: R&D Strategy • Expertise:

Pattern Recognition & Machine Learning, Signal Processing & Multimedia, Mobile Networks

Fun:

Bike Riding, Fly Fishing, and Wine Tasting2


Who is DOCOMO?

• 61 million subscribers in Japan• $45 billion revenue (2013)

Next to China Mobile, Verizon, and AT&T

• “i-mode” innovator (1999)

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Revenue Structure (FY2012)

Device

ServiceCloud

Packet

Voice

Smart Phone

Voice: $13 Billion

Data: $19 Billion

Service $5.5 Billion

Feature Phone EraVoice Stage Data Stage

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Payments

Vendor1 Vendor2 Vendor3

Operator-Defined Interface

ServicesCustomers

CSP CRMSystem Integration/Operation

Operator-Own-Everything Model

Payments

Sub Vendor1 Sub Vendor2 Sub Vendor3

Proprietary Vendor InterfaceSolution Vendor

ServicesCustomers

CSP CRM

Communication-Service-Provider & Customer-Relation-Management Model

Two Distinct Operation Structures

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© 2013 NTT DOCOMO, INC. All rights reserved.6


DOCOMO asWireless Carrier, Network Vendor,

and Service Provider

Experiencing a Big Challenge

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Unbundling the corporationby John Hagel III and Marc Singer (1999)

•Customer Relationship Management–Battle for Scope: Identify, attract, and build relationships with customers

•Infra Structure Management–Battle for Scale: Build and manage facilities for high-volume, repetitive operation tasks

•Product Innovation–Battle for talent: conceive of attractive new products and services and commercialize them

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http://hbr.org/search/John%20Hagel%20III/0/author

http://hbr.org/search/John%20Hagel%20III/0/author

http://hbr.org/search/Marc%20Singer/0/author

http://hbr.org/search/Marc%20Singer/0/author


What is Innovation?

Joseph Schumpeter‘s “neuer Kombinationen” (Theorie der wirtschaftlichen Entwicklung)

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Innovation Example

2.5G Internet connectivity, DOCOMO

1998

Micro Browser, Access Co.

1995

i-mode, DOCOMO

1999Serendipity

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Wireless Technologies, the EnablersPersonal StorageSNS/Comm. Tools

3.9G LTE:～75Mbps2010

+Big data synchronization

Smartphone Platformas Application Market

3.5G: ～14Mbps 2006+Flat Rate + Cloud

Mobile Multimedia

3G: 64-384Kbps 2001+CODEC

i-mode

2G:9.6KbpsX3 1998 +micro browser

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Very Simplified Formula as Our Old Strategy

Wireless Broadband

Innovation X?

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Very Simplified Formula with Smartphone

Wireless Broadband Dumb Pipe

Smart Phone

Innovation X?

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Control Points, those who have gone...

Feature Phone

Radio Interface

OS

Middleware

AAA

Applications

OperatorPortal

No Operator’s Control Points

Smart Phone

Radio Interface

OS

Middleware

AAA

Applications

OperatorPortal

LINEFacebooki-tunes

Search Engines

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Battle for the place where people visit in the cyber space

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© 2013 NTT DOCOMO, INC. All rights reserved.16


Technology Trend 1: Personal Assistant Agent (i.e., very

thin client) with a killer new functionality

Copyright: Microsoft's "Cortana" Personal Assistant App 17


Technology Trend 2:Very Fat & Robust Pipe

and Machine Communication

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Those who have gone.19


LTE-Advanced Network　（２０１６？）

Macro Cell Base Station

Small Cell Base Station

Centeraized Radio AccessNetwork

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The Next Enablers

Personal StorageSNS/Comm. Tools

3.9G LTE:～75Mbps2010

+Big data synchronization

Smartphone Platformas Application Market

3.5G: ～14Mbps 2006+Flat Rate + Cloud

Mobile Multimedia

3G: 64-384Kbps 2001+CODEC

4G M2M/eSIM

+Large Scale Data Synchronization

Personal Agent new B2B Biz

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New Formula as Our Strategy

Machine-ConnectedLarge ScaleWireless Network

Innovation X?

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Technology Trend 3:Asset-Oriented (i.e., Core-Biz Focused) and API-Centric

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API as Alternative


Application Programing Interface (API)

PA

I

pps

artners

ncome

Adam DuVander,24


APIs mean a lot of exposure for web giants

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

2005 2006 2007 2009 2010 2011 2012

API is a key success driver for these businesses Annual growth in number of APIs: 100%

13B Calls / Day (2011.05)

5B Calls / Day (2010.04)

5B Calls / Day (2009.10)

1.4B Calls / Day (2012.05)

1.1B Calls / Day (2011.04)

1B Calls / Day (2012.05)

1B Calls / Day (2012.03)

1B Calls / Day (2010.01)

API Billionaires Club (Programmable Web) API Growth Rate (Programmable Web)

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Why API matters

Disadvantages•Limited user reach•Limited brand awareness

Traditional Web business model APIs help you grow your business

Advantages•Unlock distribution channels•Expand user reach through the

V.S.

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APIs enable business to create “ Revenue Ecosystem”

Amazon.comMobile Apps

Affiliate Sites

Supplemental Services Internal Developers

+ API

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Change of API Offering Models

Consumer Product

End Users

API API API

Cloud API

Developers

End Users

Developers

Consumer oriented API Offering

(e.g.)

(e.g.)

Cloud oriented API Offering

Cloud APIs provide “Utilities” that can be used to build consumer products

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Rise of Cloud API Startups

Location Billing AnalyticsCommunication

Authentication

Banking Shipment Print Healthcare Translation

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Whey are they focusing on the APIs ?

ConsumerProduct

User Acquisition

User Data

APIs

3rd PartyIntegration

ConsumerProduct

User Acquisition

User Data

APIs

3rd PartyIntegration

1

2

3

4

5

1

2

3

These processes has become harder & harder for the startups

That’s why API startups only focusing on APIs and data acquisition

Traditional B2C Business Process API oriented business process

These processes has been covered by 3rd parties

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Yet Another New Formula

Your Asset Innovation X?APIDesign

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Let’s see what will happen soon.32